KUALA LUMPUR (June 13): Maybank IB Research has maintained its Neutral rating on the plantation sector and said earnings growth may only be visible in 2H12.
In a note Wednesday, the research house said the key take away from the May 2012 MPOB statistics was that Malaysia's CPO production fell 16.8% and 20.6% YoY respectively in Apr-May (but rose 5.1% to 8.7% MoM).
“Coupled with weaker CPO ASPs of MYR3,295/t (-1.6% YoY) for the 2Q to 11 Jun and a weak spot price of about MYR3,000/t, 2Q12 earnings of plantation groups are likely to stay weak YoY (but be relatively stronger QoQ).
“Maintain Neutral on the sector. Top BUYs are Ta Ann and SOP for their attractive valuations and growth prospects,” it said.